FX Action: USD-CAD has been steady FX Action: USD-CAD has been steady over 1.3000, but for a quick dip to 1.2994 lows earlier. The weak commodity backdrop continues to weigh on the CAD, as WTI crude hit fresh lows of $47.22. The pairing remains off its trend high however, as profit taking has been a factor over the past session. The near 8% rise in USD-CAD over the past month or so has likely resulted in a crowded long trade, and analysts expect some of recent gains to come undone before the pairing can move higher.

Treasury's $48 B bill auctions found no significant benefit Treasury's $48 B bill auctions found no significant benefit from flight to safety amid a global rout in stocks, with the shorter tranche underperforming. The 3-month bill stopped at 0.05%, right on the screws, but 2 bps above last week's 0.03% award rate. Bids totaled only $87 B for a modest 3.68 cover, the lowest since October 2013. Indirect bidders took only 17.7%, down from 23.0% last week and the 21.3% average. The 6-month bill stopped through at 0.145%, versus 0.15% at the bid deadline, and 1 bp cheaper than last week. There were $94.5 B in bids for a 3.99 cover, only a little better than last week's 3.67, but less than the 4.18 average. Indirect bidders were awarded 47.5% versus the prior 34.8% and the 41.6% average.

ChinaMeltdown is the popular tag on Twitter overnight ChinaMeltdown is the popular tag on Twitter overnight prefaced by the ubiquitous hashtag, as in #ChinaMeltdown, with mostly leaning with the grain of the 8.5% equity decline there that has again bled into commodity prices and stocks, and few willing to challenge the trend despite Chinese shares still with some cushion in terms of gains for the year. Stocks continue to sag in NY with NASDAQ off 0.7%, though Europe has extended its drop as the Euro Stoxx 50 is now 2.1% lower and the German DAX is 2.3% lower. That suggests pressure will remain downward at least until Europe closes, though the 200-day m.a. on the S&P 500 near 2063 may provide some initial support according to UBS's Art Cashin.

FOMC may offer fresh clues on rate liftoff, according to a WSJ article FOMC may offer fresh clues on rate liftoff, according to a WSJ article by Ben Leubsdorf and Jon Hilsenrath, where the authors appeal to recent speeches/testimony suggesting rate hikes could begin this year. But as noted in the piece, the Fed will have "a slight signaling challenge...How aggressively should officials tip their hands about the timing of a rate increase later this year?" Analysts don't believe that policymakers can provide any clear hints. For months the FOMC has stressed the data dependent nature of the policy path. And so with a couple of more months' worth of key economic and price reports on tap prior to the September 16, 17, not to mention an increasingly shaky financial environment, it would not only be inconsistent for hints to be provided this week, but would jeopardize their credibility.

Energy Action: NYMEX crude touched new trend lows Energy Action: NYMEX crude touched new trend lows of $47.41 overnight, with its eyes now on the April 1 low of $47.01. A bout of dollar weakness failed to support prices, as another China equity market sell-off dented demand expectations. On the supply side, an uptick in operating oil rigs last week implies gains in U.S. production, while reports that Iraq will produce record volumes this month, should keep pressure on prices for the foreseeable future. RBOB gasoline futures remained near three-month lows under $1.8150, leaving average U.S. retail prices at $2.71/gallon, and down more than 4 cents over the past week, per AAA data. Natural gas futures declined a penny to $2.76/M BTU.